Metro Bancorp Reports Record Quarterly Net Income of $5.1 Million; EPS up 25% and Loans Grow 14%

  Metro Bancorp Reports Record Quarterly Net Income of $5.1 Million; EPS up
  25% and Loans Grow 14%

Business Wire

HARRISBURG, Pa. -- July 23, 2014

Metro Bancorp, Inc. (Metro or the Company) (NASDAQ Global Select Market
Symbol: METR), parent company of Metro Bank, today reported record quarterly
net income of $5.1 million, or $0.35 per diluted common share, for the quarter
ended June30, 2014, compared to net income of $4.0 million, or $0.28 per
diluted common share, for the second quarter of 2013. The Company also
reported net loan growth of $221.7 million, or 14%, over the past twelve
months.


Financial Highlights
(in millions, except per share data)
                                                                   
             Quarter Ended                            Six Months Ended
                                         %                                      %
          06/30/14    06/30/13    Increase     06/30/14   06/30/13   Increase
Total        $ 2,868.9     $ 2,658.4     8    %
assets
                                                                                     
Total
loans          1,827.5       1,605.8     14   %
(net)
                                                                                     
Total          2,187.0       2,168.8     1    %
deposits
                                                               
                                                                                     
Total        $ 31.5        $ 29.9        5    %       $  61.9      $  59.6      4    %
revenues
                                                                                     
Net            5.1           4.0         26   %          10.0         7.7       30   %
income
                                                                                     
Diluted
net
income       $ 0.35        $ 0.28        25   %       $  0.70      $  0.54      30   %
per
common
share
                                                             
                                                                                     

“Our continued focus on increasing the Company's profitability is evidenced by
another quarter of record net income,” said Gary L. Nalbandian, the Company's
Chairman and Chief Executive Officer. "Total revenues grew by 5% for the
quarter over the prior year same quarter and we remain diligent with our
expense management. We continue to strengthen the Company's balance sheet, as
well with 14% net loan growth over the past twelve months and continued
improvement in asset quality."

Income Statement Highlights

  *The Company recorded net income of $5.1 million, or $0.35 per diluted
    common share, for the second quarter of 2014 compared to net income of
    $4.0 million, or $0.28 per diluted common share, for the same period one
    year ago; a $1.0 million, or 26%, increase. Net income for the first six
    months of 2014 totaled $10.0 million, or $0.70 per diluted common share;
    up $2.3 million, or 30%, over $7.7 million, or $0.54 per diluted common
    share recorded for the first half of 2013.
  *Total revenues (net interest income plus noninterest income) for the
    second quarter of 2014 were $31.5 million, up $1.6 million, or 5%, over
    total revenues of $29.9 million for the same quarter one year ago and were
    up $1.1 million, or 4%, over total revenues of $30.4 million for the
    previous quarter. Total revenues for the first half of 2014 increased $2.3
    million, or 4%, over the first half of 2013.
  *Return on average stockholders' equity ("ROE") was 8.30% for the second
    quarter of 2014, compared to 6.90% for the same period last year. ROE for
    the first six months of 2014 was 8.36%, compared to 6.59% for the first
    half of 2013.
  *The Company's net interest margin on a fully-taxable basis for the second
    quarter of 2014 was 3.59%, compared to 3.56% recorded in the first quarter
    of 2014 and compared to 3.62% for the second quarter of 2013. The
    Company's deposit cost of funds for the second quarter was 0.26%, compared
    to 0.27% for the previous quarter and compared to 0.29% for the same
    period one year ago.
  *The provision for loan losses totaled $1.1 million for the second quarter
    of 2014, compared to $900,000 for the previous quarter and compared to
    $1.8 million for the second quarter one year ago. The provision for loan
    losses for the first half of 2014 was down $2.1 million, or 51%, from the
    first half of 2013.
  *Noninterest expenses for the second quarter of 2014 were $23.0 million, up
    $239,000, or 1%, compared to the previous quarter and up $661,000, or 3%,
    over the same quarter last year. Total noninterest expenses for the first
    six months of 2014 were up $1.1 million, or 2%, compared to the first six
    months of 2013.

Balance Sheet Highlights

  *Net loans grew $49.2 million, or 3%, on a linked quarter basis to $1.83
    billion and were up $221.7 million, or 14%, over the second quarter 2013.
  *Nonperforming assets were 1.42% of total assets at June30, 2014, compared
    to 1.57% of total assets for the previous quarter and compared to 1.81% of
    total assets one year ago.
  *Total deposits were $2.19 billion, up $18.2 million, or 1%, compared to
    same quarter last year.
  *Metro's capital levels remain strong with a Tier 1 Leverage ratio of 9.57%
    and a total risk-based capital ratio of 14.55%.
  *Stockholders' equity totaled $248.8 million, or 8.67% of total assets, at
    the end of the second quarter 2014. At June30, 2014, the Company's book
    value per share was $17.45. The market price of Metro's common stock
    increased by 15% from $20.03 per common share at June30, 2013 to $23.12
    per common share at June30, 2014.

Income Statement Overview

                                      
                Three months ended                   Six months ended
                                                
                June 30,                             June 30,
(dollars in
thousands,    2014       2013       %        2014       2013       %
except per                                Change                               Change
share data)
Total           $ 31,490   $ 29,933   5    %   $ 61,903   $ 59,643   4    %
revenues
Provision
for loan          1,100        1,800      (39  )       2,000        4,100      (51  )
losses
Total
noninterest      23,021       22,360     3          45,803       44,689     2    
expenses
Net income       5,081        4,048      26         10,025       7,693      30   
Diluted net
income per    $ 0.35     $ 0.28     25   %   $ 0.70     $ 0.54     30   %
common
share
                                                                                    

Metro recorded net income of $5.1 million, or $0.35 per diluted common share,
for the second quarter of 2014 compared to net income of $4.0 million, or
$0.28 per diluted common share, for the second quarter of 2013. On a linked
quarter basis, net income increased $137,000, or 3%.

Net income for the first six months of 2014 was $10.0 million compared to $7.7
million recorded in the first six months of 2013, up 30%. Earnings per diluted
common share for the first half of 2014 were $0.70 compared to $0.54 for the
same period last year, a 30% increase.

Total revenues (net interest income plus noninterest income) for the second
quarter of 2014 were $31.5 million, up $1.6 million, or 5%, over the second
quarter of 2013. Total revenues for the first six months of 2014 were $61.9
million, up $2.3 million, up 4%, over the first half of 2013.

Noninterest expenses for the quarter totaled $23.0 million, up $661,000, or
3%, compared to the same period in 2013. On a linked quarter basis, total
noninterest expenses were up $239,000. Total noninterest expenses for the
first half of 2014 were $45.8 million, up $1.1 million, or 2%, over the same
period last year.

Net Interest Income and Net Interest Margin

Net interest income for the second quarter of 2014 totaled $24.0 million, up
$1.4 million, or 6%, over the second quarter of 2013. For the first six months
of 2014, net interest income totaled $47.3 million versus $44.9 million for
same period in 2013, a $2.4 million, or 5%, increase.

Average interest-earning assets for the second quarter of 2014 totaled $2.72
billion versus $2.68 billion for the previous quarter and were up $172.5
million, or 7%, over the second quarter of 2013. Average loans receivable
increased by $202.8 million, or 12%, and average investment securities
decreased by $30.3 million, or 3%, for the second quarter 2014 compared to the
same period one year ago. Average interest-bearing deposits totaled $1.69
billion for the second quarter of 2014, up $37.4 million, or 2%, over the same
period of 2013 and average noninterest-bearing deposits for the second quarter
2014 were $476.6 million, up $36.0 million, or 8%, over the second quarter
last year. Average interest earning assets for the first six months of 2014
totaled $2.70 billion versus $2.52 billion for the first six months of 2013,
an increase of $177.3 million, or 7%.

The net interest margin for the second quarter of 2014 was 3.50%, up 2 bps
from the 3.48% recorded for the previous quarter and down 2 bps from the
second quarter one year ago. The net interest margin on a fully-taxable basis
for the second quarter of 2014 was 3.59%, up 3 bps over the previous quarter
and down 3 bps compared to 3.62% for the second quarter of 2013.

The net interest margin for the first half of 2014 was 3.49%, down 6 bps from
the 3.55% recorded for the first six months of 2013. On a fully-taxable basis,
the net interest margin for the first six months of 2014 was 3.58%, down 6 bps
compared to 3.64% for the first half of 2013.

The Company's deposit cost of funds for the second quarter of 2014 was 0.26%,
compared to 0.27% for the previous quarter, and down 3 bps from 0.29% recorded
in the second quarter one year ago. Metro's deposit cost of funds decreased
from 0.30% in the first six months of 2013 to 0.26% for the same period in
2014. The total cost of all funding sources for the second quarter was 0.31%,
compared to the same amount for the previous quarter and down 2 basis points
from the same period in 2013.

Change in Net Interest Income and Rate/Volume Analysis

As shown in the following table, the increase in net interest income on a
fully tax-equivalent basis for the second quarter and for the first six months
of 2014 over the same periods of 2013 was primarily due to an increase in the
level of interest earning assets, offset partially by a slightly lower net
interest margin. Lower yields on interest earning assets were partially offset
by a reduction in the Company's cost of funds.

                        
(dollars in thousands)   Tax Equivalent Net Interest Income
                           Volume      Rate           Total        %
2014 vs. 2013                                             
                           Change      Change         Increase     Increase
2nd Quarter              $ 2,246   $ (885   )   $  1,361   6    %
Six Months               $ 4,585   $ (2,258 )   $  2,327   5    %
                                                                        

Noninterest Income

Noninterest income for the second quarter of 2014 totaled $7.5 million, up
$161,000, or 2%, over the second quarter one year ago. Service charges and
fees for the second quarter were $7.4 million, up $264,000, or 4%, over the
second quarter last year. Gains on the sale of loans totaled $138,000 for the
second quarter of 2014 versus $250,000 for the same period in 2013.

Noninterest income for the first six months of 2014 decreased $136,000, or 1%,
compared to the first half of 2013. Service charges and fees were up 2% for
the first half of 2014 compared to 2013 while gains on the sale of loans were
$274,000 during the first six months of 2014 compared to $663,000 in the same
period of 2013. The decrease in loan sale gains for both second quarter and
first six months was the result of a lower level of residential loan sales to
the secondary market in 2014 compared to the same periods in 2013. Net gains
on sales of securities during the first six months of 2014 were $11,000
compared to net gains of $21,000 in the first six months of 2013.

The breakdown of noninterest income for the second quarter and for the first
six months of 2014 and 2013, respectively, is shown in the table below:

                                                             
              Three months ended                 Six months ended
                June 30,                             June 30,
(dollars in   2014      2013        %          2014       2013       %
thousands)                                Change                               Change
Service
charges,
fees and        $ 7,357   $ 7,093     4    %     $ 14,288   $ 14,025   2   %
other
income
Gains on
sales of          138         250         (45  )       274          663        (59 )
loans
Net gains
(losses) on
sales/calls    —        (9    )   (100 )      11        21       (48 )
of
securities
Total
noninterest   $ 7,495   $ 7,334    2    %   $ 14,573   $ 14,709   (1  )%
income
                                                                                   

Noninterest Expenses

Noninterest expenses for the second quarter of 2014 were $23.0 million, up
$661,000, or 3%, compared to $22.4 million recorded in the second quarter one
year ago. For the first six months of 2014, noninterest expenses totaled $45.8
million, up $1.1 million, or 2%, over $44.7 million recorded for the first
half of 2013.

The breakdown of noninterest expenses for the second quarter and for the first
six months of 2014 and 2013, respectively, are shown in the table below:

                                                             
              Three months ended                 Six months ended
                June 30,                             June 30,
(dollars in   2014       2013       %        2014       2013       %
thousands)                                Change                               Change
Salaries
and             $ 11,055   $ 10,391   6   %    $ 22,482   $ 21,216   6   %
employee
benefits
Occupancy
and               3,098        3,335      (7  )        6,603        6,545      1
equipment
Advertising
and               376          389        (3  )        769          745        3
marketing
Data              3,320        3,276      1            6,570        6,482      1
processing
Regulatory
assessments       584          551        6            1,153        1,085      6
and related
costs
Other          4,588     4,418    4        8,226     8,616    (5  )
expenses
Total
noninterest   $ 23,021   $ 22,360   3   %    $ 45,803   $ 44,689   2   %
expenses
                                                                               

Balance Sheet

                                                             
                             As of June 30,               
                                                               %
(dollars in thousands)       2014          2013         
                                                               Increase
Total assets                   $ 2,868,928   $ 2,658,405     8    %
                                                                   
Total loans (net)                1,827,544       1,605,828     14   %
                                                                    
Total deposits                   2,186,980       2,168,759     1    %
                                                                    
Total core deposits              2,119,262       2,102,450     1    %
                                                                    
Total stockholders' equity    248,770      228,468     9    %
                                                                    

Lending

Gross loans totaled $1.85 billion at June30, 2014, an increase of $217.9
million, or 13%, over June30, 2013. The composition of the Company's loan
portfolio at June30, 2014 and June30, 2013 was as follows:

                                                                   
(dollars in      June 30,        % of      June 30,        % of      $               %
thousands)     2014                  2013                               
                                 Total                     Total     Change          Change
Commercial
and            $ 467,587     25  %   $ 415,740     25  %   $ 51,847      12  %
industrial
Commercial         76,674        4           82,455        5           (5,781  )     (7  )
tax-exempt
Owner
occupied           308,708       17          288,702       18          20,006        7
real estate
Commercial
construction
                   130,449       7           105,596       6           24,853        24
and land
development
Commercial         544,544       29          433,628       27          110,916       26
real estate
Residential        103,564       6           90,590        6           12,974        14
Consumer        220,289     12      217,155     13      3,134      1   
Gross loans    $ 1,851,815   100 %   $ 1,633,866   100 %   $ 217,949    13  %
                                                                                     

Asset Quality

The Company's asset quality ratios are shown below:

                                   
                                    Quarters Ended
                                   June 30, 2014   March 31,   June 30,
                                                        2014          2013
Nonperforming assets/total assets     1.42     %      1.57   %    1.81  %
Net loan charge-offs                  0.17     %        0.02   %      0.31  %
(annualized)/average total loans
Loan loss allowance/total loans       1.31     %        1.33   %      1.72  %
Nonperforming loan coverage           66       %        59     %      64    %
Nonperforming assets/capital and    15       %      17     %    19    %
reserves
                                                                            

Nonperforming assets decreased during the second quarter of 2014 by $4.2
million, or 9%, to $40.7 million, or 1.42%, of total assets at June30, 2014,
compared to $44.9 million, or 1.57%, of total assets at March31, 2014, and
compared to $48.1 million, or 1.81%, of total assets one year ago.
Nonperforming assets were down $7.5 million, or 15%, over the past twelve
months.

Nonperforming loans decreased by $4.2 million during the second quarter of
2014, while foreclosed asset balances increased by $30,000. Compared to
June30, 2013, nonperforming loans decreased $6.9 million, or 16%, and
foreclosed assets decreased $591,000, or 13%.

Net loan charge-offs totaled $763,000 for the second quarter of 2014,
comprised of $1.3 million in gross loan charge-offs offset partially by
$535,000 in recoveries. Total net charge-offs for the first six months of 2014
were $839,000, or 0.09%, of average loans outstanding compared to $1.3
million, or 0.17%, for the first half of 2013.

The Company recorded a provision for loan losses of $1.1 million for the
second quarter of 2014 as compared to $900,000 for the previous quarter and
$1.8 million recorded in the second quarter of 2013. The allowance for loan
losses totaled $24.3 million as of June30, 2014, compared to $23.9 million at
March31, 2014 and to $28.0 million at June30, 2013. The allowance
represented 1.31% of gross loans outstanding at June30, 2014, compared to
1.33% at March31, 2014 and 1.72% at June30, 2013.

Deposits

The Company's deposit balances at June30, 2014 were $2.19 billion, compared
to total deposits of $2.20 billion at March31, 2014 and compared to $2.17
billion one year ago. The change in core deposits over the past twelve months
by type of account is as follows:

                                                          
                         As of June 30,                        
                                                                      2nd
                                                           %          Quarter
(dollars in thousands)   2014          2013                   2014
                                                           Change
                                                                      Cost of
                                                                      Funds
Demand                     $ 508,012     $ 463,805       10  %      0.00  %
noninterest-bearing
Demand                       1,014,347       1,009,321     —          0.28
interest-bearing
Savings                   474,416      503,110     (6  )    0.28  
Subtotal                     1,996,775       1,976,236     1          0.21  
Time                      122,487      126,214     (3  )    1.03  
Total core deposits      $ 2,119,262   $ 2,102,450   1   %    0.26  %
                                                                      

Total core deposits, excluding time deposits, increased $20.5 million, over
the past twelve months and decreased by $5.6 million, on a linked quarter
basis. The cost of core deposits, excluding time deposits, during the second
quarter of 2014 was 0.21%, compared to 0.22% for both the previous quarter and
the second quarter one year ago. The cost of total core deposits for the
second quarter of 2014 was 0.26%, which was down 1 bp from the previous
quarter and down 3 bps from second quarter of 2013.

Change in core deposits by type of customer was as follows:

                                                         
                  June 30,      % of    June 30,      % of    %
(dollars in       2014          Total   2013          Total   Change
thousands)
Consumer            $ 996,772       47  %     $ 971,156       46  %     3    %
Commercial            725,106       34          664,851       32        9
Government         397,384     19      466,443     22     (15  )
Total             $ 2,119,262   100 %   $ 2,102,450   100 %   1    %
                                                                        

Investments

At June30, 2014, the Company's investment portfolio totaled $844.9 million,
down $15.0 million, or 2%, on a linked quarter basis and down $18.6 million,
or 2%, compared to June30, 2013. Detailed below is information regarding the
composition and characteristics of the portfolio at June30, 2014:

                                                          
                                   Available       Held to
Product Description                                          Total
                                   for Sale        Maturity
(dollars in thousands)                                      
U.S. Government agencies/other     $ 31,642        $ 149,105       $ 180,747
Mortgage-backed securities:
Federal government agencies          62,737          7,515           70,252
pass through certificates
Agency collateralized mortgage       444,912         112,405         557,317
obligations
Corporate debt securities            —               5,000           5,000
Municipal securities              27,546      3,994       31,540  
Total                            $ 566,837    $ 278,019    $ 844,856 
Duration (in years)                  4.7             6.1             5.2
Average life (in years)              5.3             7.1             5.9
Quarterly average yield           2.26    %    2.53    %    2.39    %
(annualized)
                                                                   

At June30, 2014, the after-tax unrealized loss on the Bank's available for
sale portfolio was $8.8 million, as compared to an after-tax unrealized loss
of $16.5 million at December 31, 2013 and compared to an after-tax unrealized
loss of $8.0 million at June30, 2013.

Capital

Stockholders' equity at June30, 2014 totaled $248.8 million, compared to
$228.5 million at June30, 2013. Return on average stockholders' equity (ROE)
for the second quarter of 2014 was 8.30%, compared to 8.42% for the previous
quarter and up over 6.90% for the second quarter last year. ROE for the first
six months of 2014 was 8.36%, compared to 6.59% for the first half of 2013.

The Company's capital ratios at June30, 2014 and 2013 were as follows:

                                      
                                               Regulatory

                6/30/2014   6/30/2013   Guidelines “Well

                                               Capitalized”
Leverage ratio   9.57   %    9.37   %    5.00       %
Tier 1             13.36         13.63         6.00
Total capital    14.55      14.89      10.00      
                                               

Both the Company and its subsidiary bank continue to maintain strong capital
ratios and are well capitalized under various regulatory capital guidelines as
required by federal banking agencies.

At June30, 2014, the Company's book value per common share was $17.45
compared to $16.09 one year ago.

The market price of Metro's common stock increased by 15% from $20.03 per
common share at June30, 2013 to $23.12 per common share at June30, 2014.

Forward-Looking Statements

This document contains forward-looking statements, within the meaning of
Section 27A of the Securities Act of 1933, as amended, which we refer to as
the Securities Act and Section 21E of the Securities Exchange Act of 1934,
which we refer to as the Exchange Act, with respect to the financial
condition, liquidity, results of operations, future performance and business
of Metro Bancorp, Inc. These forward-looking statements are intended to be
covered by the safe harbor for "forward-looking statements" provided by the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
are those that are not historical facts. These forward-looking statements
include statements with respect to our beliefs, plans, objectives, goals,
expectations, anticipations, estimates and intentions that are subject to
significant risks and uncertainties and are subject to change based on various
factors (some of which are beyond our control). The words "may," "could,"
"should," "would," "believe," "anticipate," "estimate," "expect," "intend,"
"plan" and similar expressions are intended to identify forward-looking
statements.

While we believe our plans, objectives, goals, expectations, anticipations,
estimates and intentions as reflected in these forward-looking statements are
reasonable, we can give no assurance that any of them will be achieved. You
should understand that various factors, in addition to those discussed
elsewhere in this document, could affect our future results and could cause
results to differ materially from those expressed in these forward-looking
statements, including:

  *the effects of and changes in, trade, monetary and fiscal policies,
    including interest rate policies of the Board of Governors of the Federal
    Reserve System, including the duration of such policies;
  *general economic or business conditions, either nationally, regionally or
    in the communities in which we do business, may be less favorable than
    expected, resulting in, among other things, a deterioration in credit
    quality and loan performance or a reduced demand for credit;
  *the effects of ongoing short and long-term federal budget and tax
    negotiations and their effects on economic and business conditions in
    general and our customers in particular;
  *the effects of the failure of the federal government to reach a deal to
    permanently raise the debt ceiling and the potential negative results on
    economic and business conditions;
  *the impact of the Dodd-Frank Wall Street Reform and Consumer Protection
    Act (Dodd-Frank Act) and other changes in financial services’ laws and
    regulations (including laws concerning taxes, banking, securities and
    insurance);
  *possible impacts of the capital and liquidity requirements of the Basel
    III standards and other regulatory pronouncements;
  *continued effects of the aftermath of recessionary conditions and the
    impacts on the economy in general and our customers in particular,
    including adverse impacts on loan utilization rates as well as
    delinquencies, defaults and customers' ability to meet credit obligations;
  *our ability to manage current levels of impaired assets;
  *continued levels of loan volume origination;
  *the adequacy of the allowance for loan losses;
  *the impact of changes in Regulation Z and other consumer credit protection
    laws and regulations;
  *changes resulting from legislative and regulatory actions with respect to
    the current economic and financial industry environment;
  *changes in the Federal Deposit Insurance Corporation (FDIC) deposit fund
    and the associated premiums that banks pay to the fund;
  *interest rate, market and monetary fluctuations;
  *the results of the regulatory examination and supervision process;
  *unanticipated regulatory or legal proceedings and liabilities and other
    costs;
  *compliance with laws and regulatory requirements of federal, state and
    local agencies;
  *our ability to continue to grow our business internally or through
    acquisitions and successful integration of new or acquired entities while
    controlling costs;
  *deposit flows;
  *the willingness of customers to substitute competitors’ products and
    services for our products and services and vice versa, based on price,
    quality, relationship or otherwise;
  *changes in consumer spending and saving habits relative to the financial
    services we provide;
  *the ability to hedge certain risks economically;
  *the loss of certain key officers;
  *changes in accounting principles, policies and guidelines as may be
    adopted by the regulatory agencies, as well as the Public Company
    Accounting Oversight Board, the Financial Accounting Standards Board
    (FASB), and other accounting standards setters;
  *the timely development of competitive new products and services by us and
    the acceptance of such products and services by customers;
  *rapidly changing technology;
  *continued relationships with major customers;
  *effect of terrorist attacks and threats of actual war;
  *other economic, competitive, governmental, regulatory and technological
    factors affecting the Company’s operations, pricing, products and
    services;
  *interruption or breach in security of our information systems resulting in
    failures or disruptions in customer account management, general ledger
    processing and loan or deposit systems;
  *our ability to maintain compliance with the exchange rules of The Nasdaq
    Stock Market, Inc.;
  *our ability to maintain the value and image of our brand and protect our
    intellectual property rights;
  *disruptions due to flooding, severe weather or other natural disasters or
    Acts of God; and
  *our success at managing the risks involved in the foregoing.

Because such forward-looking statements are subject to risks and
uncertainties, actual results may differ materially from those expressed or
implied by such statements. The foregoing list of important factors is not
exclusive and you are cautioned not to place undue reliance on these factors
or any of our forward-looking statements, which speak only as of the date of
this document or, in the case of documents incorporated by reference, the
dates of those documents. We do not undertake to update any forward-looking
statements, whether written or oral, that may be made from time to time by or
on behalf of us except as required by applicable law.


Metro Bancorp, Inc. and Subsidiaries
Selected Consolidated Financial Data
                                                                                                              
                  At or for the                                                            At or for the
               Three Months Ended                                                     Six Months Ended
(dollars in
thousands,        June 30,          March 31,         %          June 30,       %          June 30,          June 30,          %
except per      2014            2014            Change   2013         Change   2014            2013            Change
share
amounts)
Income
Statement
Data:
Net interest      $ 23,995          $ 23,335          3   %      $ 22,599       6    %     $ 47,330          $ 44,934          5    %
income
Provision for       1,100             900             22           1,800        (39  )       2,000             4,100           (51  )
loan losses
Noninterest         7,495             7,078           6            7,334        2            14,573            14,709          (1   )
income
Total               31,490            30,413          4            29,933       5            61,903            59,643          4
revenues
Noninterest         23,021            22,782          1            22,360       3            45,803            44,689          2
expenses
Net income          5,081             4,944           3            4,048        26           10,025            7,693           30
Per Common
Share Data:
Net income
per common
share:
Basic             $ 0.36            $ 0.35            3   %      $ 0.28         29   %     $ 0.70            $ 0.54            30   %
Diluted             0.35              0.34            3            0.28         25           0.70              0.54            30
                                                                                                                                    
Book Value        $ 17.45           $ 16.92                      $ 16.09                   $ 17.45           $ 16.09           8
                                                                                                                                    
Weighted
average
common shares
outstanding:
Basic               14,184            14,161                       14,137                    14,172            14,134
Diluted             14,387            14,344                       14,256                    14,366            14,209
Balance Sheet
Data:
Total assets      $ 2,868,928       $ 2,850,039       1   %                                $ 2,868,928       $ 2,658,405       8    %
Loans (net)         1,827,544         1,778,311       3                                      1,827,544         1,605,828       14
Allowance for       24,271            23,934          1                                      24,271            28,038          (13  )
loan losses
Investment          844,856           859,887         (2  )                                  844,856           863,462         (2   )
securities
Total               2,186,980         2,195,272       —                                      2,186,980         2,168,759       1
deposits
Core deposits       2,119,262         2,128,101       —                                      2,119,262         2,102,450       1
Stockholders'       248,770           240,787         3                                      248,770           228,468         9
equity
Capital:
Total
stockholders'                         8.45      %                                            8.67      %       8.59      %
equity to
assets
Leverage                              9.48                                                   9.57              9.37
ratio
Risk based
capital
ratios:
Tier 1                                13.39                                                  13.36             13.63
Total Capital                         14.59                                                  14.55             14.89
Performance
Ratios:
Deposit cost        0.26      %       0.27      %                  0.29   %                  0.26      %       0.30      %
of funds
Cost of funds       0.31              0.31                         0.33                      0.31              0.34
Net interest        3.50              3.48                         3.52                      3.49              3.55
margin
Return on
average             0.72              0.72                         0.60                      0.72              0.58
assets
Return on
average             8.30              8.42                         6.90                      8.36              6.59
stockholders'
equity
Asset
Quality:
Net
charge-offs
(annualized)        0.17      %       0.02      %                  0.31   %                  0.09      %       0.17      %
to average
loans
outstanding
Nonperforming
assets to
total               1.42              1.57                                                   1.42              1.81
period-end
assets
Allowance for
loan losses
to total            1.31              1.33                                                   1.31              1.72
period-end
loans
Allowance for
loan losses
to period-end       66                59                                                     66                64
nonperforming
loans
Nonperforming
assets to        15            17                                    15            19               
capital and
allowance
                                                                                                                                    

                                                            
Metro Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
                                                                   
                                               June 30,          December 31,
                                               2014              2013
(in thousands, except share and per share    (Unaudited)               
amounts)
                                                                             
Assets                                                              
Cash and cash equivalents                      $ 59,203          $ 44,996
Securities, available for sale at fair           566,837           585,923
value
Securities, held to maturity at cost (fair       278,019           283,814
value 2014: $268,243; 2013: $263,697)
Loans, held for sale                             5,881             6,225
Loans receivable, net of allowance for
loan losses (allowance 2014: $24,271;            1,827,544         1,727,762
2013: $23,110)
Restricted investments in bank stock             23,955            20,564
Premises and equipment, net                      74,393            75,783
Other assets                                  33,096        36,051    
Total assets                                 $ 2,868,928    $ 2,781,118 
                                                                             
Liabilities and Stockholders' Equity                                
Deposits:
Noninterest-bearing                            $ 508,012         $ 443,287
Interest-bearing                              1,678,968     1,796,334 
Total deposits                                   2,186,980         2,239,621
Short-term borrowings                            401,675           277,750
Long-term debt                                   15,800            15,800
Other liabilities                             15,703        17,764    
Total liabilities                                2,620,158         2,550,935
Stockholders' Equity:
Preferred stock - Series A noncumulative;
$10.00 par value; $1,000 liquidation             400               400
preference; (1,000,000 shares authorized;
40,000 shares issued and outstanding)
Common stock - $1.00 par value; 25,000,000
shares authorized; (issued and outstanding       14,194            14,157
shares 2014: 14,193,513; 2013: 14,157,219)
Surplus                                          159,476           158,650
Retained earnings                                83,476            73,491
Accumulated other comprehensive loss          (8,776    )    (16,515   )
Total stockholders' equity                    248,770       230,183   
Total liabilities and stockholders' equity   $ 2,868,928    $ 2,781,118 
                                                                             

                                                             
Metro Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)
                                                       
                             Three Months Ended          Six Months Ended
                             June 30,                    June 30,
(in thousands, except      2014       2013         2014       2013
per share amounts)
Interest Income                                         
Loans receivable,
including fees:
Taxable                      $ 19,938     $ 18,516       $ 39,148     $ 36,487
Tax-exempt                     834          905            1,695        1,836
Securities:
Taxable                        5,018        5,007          10,064       10,366
Tax-exempt                  191       184        381       368
Total interest income       25,981    24,612     51,288    49,057
Interest Expense                                        
Deposits                       1,401        1,525          2,835        3,144
Short-term borrowings          278          181            509          312
Long-term debt              307       307        614       667
Total interest expense      1,986     2,013      3,958     4,123
Net interest income            23,995       22,599         47,330       44,934
Provision for loan          1,100     1,800      2,000     4,100
losses
Net interest income
after provision for loan    22,895    20,799     45,330    40,834
losses
Noninterest Income                                      
Service charges, card          7,357        7,093          14,288       14,025
and other income
Gains on sales of loans     138       250        274       663
Total fees and other        7,495     7,343      14,562    14,688
income
Net gains (losses) on
sales/calls of              —         (9     )    11        21
securities
Total noninterest income    7,495     7,334      14,573    14,709
Noninterest Expenses                                    
Salaries and employee          11,055       10,391         22,482       21,216
benefits
Occupancy and equipment        3,098        3,335          6,603        6,545
Advertising and                376          389            769          745
marketing
Data processing                3,320        3,276          6,570        6,482
Regulatory assessments         584          551            1,153        1,085
and related costs
Other                       4,588     4,418      8,226     8,616
Total noninterest           23,021    22,360     45,803    44,689
expenses
Income before taxes            7,369        5,773          14,100       10,854
Provision for federal       2,288     1,725      4,075     3,161
income taxes
Net income                 $ 5,081    $ 4,048     $ 10,025   $ 7,693
Net Income per Common
Share
Basic                        $ 0.36       $ 0.28         $ 0.70       $ 0.54
Diluted                     0.35      0.28       0.70      0.54
Average Common and
Common Equivalent Shares
Outstanding
Basic                          14,184       14,137         14,172       14,134
Diluted                     14,387    14,256     14,366    14,209
                                                                        


Metro Bancorp, Inc. and Subsidiaries Average Balances and Net Interest Income
(unaudited)
                                                                                                                                                                                        
                                                                                                                                                                
                          Quarters ended,                                                                                                         Year-to-date,
                       June 30, 2014                         March 31, 2014                        June 30, 2013                         June 30, 2014                         June 30, 2013
                          Average                      Avg.       Average                      Avg.       Average                      Avg.       Average                      Avg.       Average                      Avg.
                          Balance       Interest   Rate     Balance       Interest   Rate     Balance       Interest   Rate     Balance       Interest   Rate     Balance       Interest   Rate
(dollars in
thousands)
Earning Assets
Investment
securities:
Taxable                   $ 858,174       $ 5,018      2.34 %     $ 876,249       $ 5,046      2.30 %     $ 889,510       $ 5,007      2.25 %     $ 867,161       $ 10,064     2.32 %     $ 903,261       $ 10,366     2.30 %
Tax-exempt               30,941       293      3.79     30,927       293      3.79     29,871       284      3.80     30,934       586      3.79     29,870       567      3.80 
Total securities            889,115         5,311      2.39         907,176         5,339      2.35         919,381         5,291      2.30         898,095         10,650     2.37         933,131         10,933     2.34
Total loans              1,830,846    21,222   4.60     1,775,981    20,534   4.63     1,628,073    19,908   4.85     1,803,564    41,756   4.62     1,591,199    39,311   4.93 
receivable
Total earning assets    $ 2,719,961   $ 26,533   3.88 %   $ 2,683,157   $ 25,873   3.86 %   $ 2,547,454   $ 25,199   3.93 %   $ 2,701,659   $ 52,406   3.87 %   $ 2,524,330   $ 50,244   3.97 %
Sources of Funds
Interest-bearing
deposits:
Regular savings           $ 464,780       $ 319        0.28 %     $ 460,324       $ 336        0.30 %     $ 424,474       $ 335        0.32 %     $ 462,564       $ 654        0.29 %     $ 419,414       $ 661        0.32 %
Interest checking and       1,033,565       709        0.28         1,070,068       719        0.27         1,039,872       733        0.28         1,051,715       1,429      0.27         1,058,702       1,535      0.29
money market
Time deposits               124,209         318        1.03         126,453         329        1.06         130,015         397        1.22         125,325         647        1.04         134,298         844        1.27
Public time and other    69,071       55       0.32     64,717       50       0.32     59,894       60       0.40     66,906       105      0.32     57,423       104      0.37 
noncore deposits
Total
interest-bearing            1,691,625       1,401      0.33         1,721,562       1,434      0.34         1,654,255       1,525      0.37         1,706,510       2,835      0.34         1,669,837       3,144      0.38
deposits
Short-term borrowings       387,611         278        0.28         356,554         231        0.26         325,044         181        0.22         372,168         509        0.27         277,243         312        0.22
Long-term debt           15,800       307      7.77     15,800       307      7.77     15,800       307      7.77     15,800       614      7.77     26,297       667      5.07 
Total
interest-bearing            2,095,036       1,986      0.38         2,093,916       1,972      0.38         1,995,099       2,013      0.40         2,094,478       3,958      0.38         1,973,377       4,123      0.42
liabilities
Demand deposits          476,605                      446,131                      440,573                      461,452                      436,850                  
(noninterest-bearing)
Sources to fund             2,571,641       1,986      0.31         2,540,047       1,972      0.31         2,435,672       2,013      0.33         2,555,930       3,958      0.31         2,410,227       4,123      0.34
earning assets
Noninterest-bearing      148,320                      143,110                      111,782                      145,729                      114,103                  
funds (net)
Total sources to fund   $ 2,719,961   $ 1,986    0.29 %   $ 2,683,157   $ 1,972    0.30 %   $ 2,547,454   $ 2,013    0.32 %   $ 2,701,659   $ 3,958    0.29 %   $ 2,524,330   $ 4,123    0.33 %
earning assets
                                                                                                                                                                                                                            
Net interest income
and margin on a                           $ 24,547     3.59 %                     $ 23,901     3.56 %                     $ 23,186     3.62 %                     $ 48,448     3.58 %                     $ 46,121     3.64 %
tax-equivalent basis
Tax-exempt adjustment                      552                                    566                                    587                                    1,118                                  1,187
Net interest income                 $ 23,995   3.50 %               $ 23,335   3.48 %               $ 22,599   3.52 %               $ 47,330   3.49 %               $ 44,934   3.55 %
and margin
                                                                                                                                                                                                                            
Other Balances:
Cash and due from         $ 42,777                                $ 43,752                                $ 50,801                                $ 43,262                                $ 46,831
banks
Other assets                70,878                                  68,553                                  90,398                                  69,722                                  91,178
Total assets                2,833,616                               2,795,462                               2,688,653                               2,814,643                               2,662,339
Other liabilities           16,325                                  17,253                                  17,725                                  16,786                                  16,763
Stockholders' equity     245,650                      238,162                      235,256                      241,927                      235,349                  
                                                                                                                                                                                                                            


Metro Bancorp, Inc. and Subsidiaries
Summary of Allowance for Loan Losses and Other Related Data
(Unaudited)

               Three Months Ended          Year Ended    Six Months Ended
                 June 30,                      December        June 30,
                                               31,
(dollars in    2014         2013         2013          2014         2013
thousands)
                                                                         
Balance at
beginning of     $ 23,934       $ 27,472       $ 25,282        $ 23,110       $ 25,282
period
Provisions
charged to      1,100      1,800      6,875       2,000      4,100  
operating
expenses
                   25,034         29,272         32,157          25,110         29,382
Recoveries
of loans
previously
charged-off:
Commercial
and                244            194            1,122           1,249          332
industrial
Commercial         —              —              —               —              —
tax-exempt
Owner
occupied           43             —              3               286            3
real estate
Commercial
construction       111            12             490             211            498
and land
development
Commercial         101            —              —               174            —
real estate
Residential        20             —              10              20             3
Consumer        16         22         76          39         58     
Total           535        228        1,701       1,979      894    
recoveries
Loans
charged-off:
Commercial
and                (501   )       (1,228 )       (3,427  )       (855   )       (1,264 )
industrial
Commercial         —              —              —               —              —
tax-exempt
Owner
occupied           (171   )       (52    )       (295    )       (196   )       (236   )
real estate
Commercial
construction       (527   )       (8     )       (2,844  )       (539   )       (25    )
and land
development
Commercial         —              (141   )       (2,773  )       (716   )       (223   )
real estate
Residential        (19    )       (14    )       (332    )       (302   )       (130   )
Consumer        (80    )    (19    )    (1,077  )    (210   )    (360   )
Total           (1,298 )    (1,462 )    (10,748 )    (2,818 )    (2,238 )
charged-off
Net             (763   )    (1,234 )    (9,047  )    (839   )    (1,344 )
charge-offs
Balance at
end of         $ 24,271    $ 28,038    $ 23,110     $ 24,271    $ 28,038 
period
Net
charge-offs
(annualized)
as a               0.17   %       0.31   %       0.55    %       0.09   %       0.17   %
percentage
of average
loans
outstanding
Allowance
for loan
losses as a
percentage         1.31   %       1.72   %       1.32    %       1.31   %       1.72   %
of
period-end
loans
                                                                                       

                                                                    
Metro Bancorp, Inc. and Subsidiaries
Summary of Nonperforming Loans and Assets
(Unaudited)
                                                                                        
The following table presents information regarding nonperforming loans and assets as of
June 30, 2014 and for the preceding four quarters (dollar amounts in thousands).
                                                               
                   June 30,       March 31,      December       September      June 30,
                                                 31,            30,
                2014         2014         2013         2013         2013
Nonperforming
Assets
Nonaccrual
loans:
Commercial and     $ 4,291        $ 9,014        $ 10,217       $ 9,967        $ 12,053
industrial
Commercial           —              —              —              —              —
tax-exempt
Owner occupied       6,401          6,005          4,838          4,924          4,999
real estate
Commercial
construction         9,028          10,734         8,587          11,723         12,027
and land
development
Commercial           5,793          6,043          6,705          6,904          3,893
real estate
Residential          6,341          6,551          7,039          7,316          7,133
Consumer          2,479      2,524      2,577      2,541      3,422  
Total
nonaccrual           34,333         40,871         39,963         43,375         43,527
loans
Loans past due
90 days or        2,335      —          369        119        —      
more and still
accruing
Total
nonperforming        36,668         40,871         40,332         43,494         43,527
loans
Foreclosed        4,020      3,990      4,477      3,556      4,611  
assets
Total
nonperforming    $ 40,688    $ 44,861    $ 44,809    $ 47,050    $ 48,138 
assets
                                                                                        
Troubled Debt
Restructurings
(TDRs)
Nonaccruing
TDRs (included     $ 17,748       $ 19,862       $ 17,149       $ 23,621       $ 18,817
in nonaccrual
loans above)
Accruing TDRs     11,309     9,970      12,091     11,078     14,888 
Total TDRs       $ 29,057    $ 29,832    $ 29,240    $ 34,699    $ 33,705 
                                                                                        
Nonperforming
loans to total       1.98   %       2.27   %       2.30   %       2.55   %       2.66   %
loans
                                                                                        
Nonperforming
assets to            1.42   %       1.57   %       1.61   %       1.71   %       1.81   %
total assets
                                                                                        
Nonperforming        66     %       59     %       57     %       63     %       64     %
loan coverage
                                                                                        
Allowance for
loan losses as
a percentage         1.31   %       1.33   %       1.32   %       1.61   %       1.72   %
of total
period-end
loans
                                                                                        
Nonperforming
assets /
capital plus      15     %    17     %    18     %    18     %    19     %
allowance for
loan losses
                                                                                        

Contact:

Metro Bancorp, Inc.
Gary L. Nalbandian
Chairman/President
(717) 412-6301
or
Mark A. Zody
Chief Financial Officer
(717) 412-6301
 
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